On March 12, 2009, the Montana House State Administration Committee held a hearing on HB 639, the “Sound Money Bill” This is the testimony of Dr. Lawrence Parks at that hearing.

Dr. Parks is the Executive Director of the Foundation for the Advancement of Monetary Education (FAME). He is also the author of the acclaimed book “What does Mr. Greenspan REALLY think?”

An extended version of this presentation can be viewed at ConstitutionalMoney.org. Please help support our efforts by making a donation at that site, or at the FAME website.

For more information, and to join the fight for sound, constitutional money, visit MontanaSoundMoney.org.

In this presentation, relying on authoritative data and the historical record, Dr. Parks explains why:

* Our monetary system is dishonest at every level, from the lack of definition of our money to the behavior of the banking system. Dishonesty cannot be cured by regulation.

* Legal tender, which is de facto coercion, is not in conformity with free markets, nor is it authorized by our Constitution.

* Jefferson, Washington, Hamilton, and Madison, whose likenesses appear on our money, condemned paper money. Madison, the principal author of the Constitution, said it was “unjust” and “unconstitutional.”

* Our monetary system is unstable and will blow up, because there is no longer any market based self-correcting mechanism for increasing financial leverage, increasing debt, or increasing the money supply. Historically, whenever the authorities have had the ability to issue legal tender irredeemable paper-ticket money, they were never able to resist the temptation to over issue. Savings, annuities, and pensions are at unacceptable risk.

* Legal tender irredeemable paper-ticket-electronic money results in interest rate volatility as well as foreign exchange rate volatility, neither of which is acceptable to the producers of goods and services at home or abroad.

* The remedy to the current financial debacle is to reassert the monetary powers and disabilities of the Constitution.

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Meaningful Insights

“The process by which banks create money is so simple that the mind is repelled.”

— John Kenneth Galbraith, Money: Whence it came, where it went – 1975, p29